Question

Use at least two scholarly sources to research international auditing standards. If all countries agreed to follow a single set of auditing standards, what would the challenges be and how could these be effectively addressed?

Answer 1

The International Accounting Standards Board (IASB) follows a rigorous open due process. All meetings of the IASB and of the IFRS Interpretations Committee (formerly IFRIC) and its formal working groups are held in public and are usually webcast.

The two key documents which govern the IASB's activities are the IFRS Foundation Constitution and the Due Process Handbook.

Due process steps

Outlined below, in overview terms, are the due process steps followed in the IASB's standard-level projects, i.e. proposed new standards, and amendments to existing standards, and Interpretations developed by the IFRS Interpretations Committee (and ratified by the IASB). These steps are:

• Research programme
• Developing a proposal for publication
• Redeliberations and finalisation
• Post-implementation reviews

Further, National accounting standard-setting bodies and regional bodies associated with accounting standard-setting or regional financial reporting bodies, academics and other interested parties, participate in these activities (this includes through the Accounting Standards Advisory Forum, ASAF).

Challenges

1. For unorganised countries like Nigeria , challenge is cultural Factors.IFRS will bring transparency and Comparabilty in the financial statemnent to the stake holders, but this may be an issues for the big companies whose financial are not transparent or have sufficient disclosures.

2.For organised countries like US, challenge is that IFRS is principle based but thier gaap are rule based.Countries like this doesn't want to give business to manipulate the Financial on principle based accounting.

Challenges can be Effectively Addressed

1. For unorganised sector , this call has to come from government and their Regional bodies to overshadow the cultural accounting.

2.For organised Sector, FASB & IASB should formulate the standard which can be applicable to all the countries with variious cases or situation.For Ex- IFRS 15 and ASC606.